Sequential Formation of Coalitions Through Bilateral Agreements in a Cournot Setting
AbstractWe study a sequential protocol of endogenous coalition formation based on a process of bilateral agreements among the players. We apply the game to a Cournot environment with linear demand and constant average costs. We show that the final outcome of any Subgame Perfect Equilibrium of the game is the grand coalition, provided the initial number of firms is high enough and they are sufficiently patient.
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Bibliographic InfoArticle provided by Springer in its journal International Journal of Game Theory.
Volume (Year): 34 (2006)
Issue (Month): 2 (August)
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Web page: http://link.springer.de/link/service/journals/00182/index.htm
Other versions of this item:
- Inés Macho-Stadler & David Pérez-Castrillo & Nicolás Porteiro, 2006. "Sequential Formation of Coalitions through Bilateral Agreements in a Cournot Setting," Working Papers 06.01, Universidad Pablo de Olavide, Department of Economics.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D40 - Microeconomics - - Market Structure and Pricing - - - General
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